Pizza and Burger giants unite; Is this a game changer for Stocks?

India’s fast-food sector is set for a major shake-up as Sapphire Foods, operator of KFC and Pizza Hut, merges with Devyani International. The deal aims to create one of India’s largest QSR operators with over 3,000 outlets. The merger comes amid slowing sales and margin pressure in the sector

Post Published By: Sona Saini

Updated : 2 January 2026, 12:47 PM IST

Devyani-Sapphire Merger to Create QSR Giant in India

New Delhi: India's quick-service restaurant (QSR) sector is undergoing a major transformation. Sapphire Foods India Limited, the operator of KFC and Pizza Hut, is set to merge with Devyani International Limited. This is considered the largest merger in the pizza and burger industry to date. This deal comes at a time when fast-food franchises in India are facing declining sales and margin pressure.

Key Terms of the Deal

According to media reports, under the merger, Devyani International will issue 177 new shares for every 100 shares of Sapphire Foods. The company expects the combined entity to generate annual profits of ₹2.1 billion to ₹2.25 billion from its second full year of operations. Additionally, group company Arctic International will acquire approximately 18.5 percent of Sapphire Foods' paid-up equity from the existing promoters, with an option to sell the stake to a financial investor.

Regulatory Approval Process

The proposed merger is still pending several regulatory and statutory approvals. These include approvals from the Stock Exchange, the Competition Commission of India, the National Company Law Tribunal, and shareholders and creditors of both companies. These processes are expected to take approximately 12 to 15 months, after which the merger will become effective.

Over 3,000 Outlets, Stiff Competition

Yum Brands' partner companies operate over 3,000 outlets in India and abroad, including KFC and Pizza Hut dine-in restaurants. In the Indian market, they compete directly with major companies like Westlife Foodworld and Jubilant FoodWorks.

Devyani to Become One of the Largest QSR Companies

According to information filed with the stock exchange, after the completion of the transaction, Devyani International will become one of India's largest QSR operators by merging the operations of both companies. Ravi Jaipuria, the company's non-executive chairman, said that this merger is a decisive step in Devyani's growth journey. This will strengthen KFC and Pizza Hut's franchise rights across India and international presence in Sri Lanka.

Strong Stock Market Reaction

Shares of Devyani International saw a strong rally in the stock market following the merger announcement. According to the BSE, the stock jumped nearly 8 percent to reach ₹159.45 during the trading session. However, it later traded at around ₹150.45 due to profit booking.